Citic Securities was down 1.8 percentin Shanghai and 0.8 percent in Hong Kong near midday after ChinaBusiness News reported that China's Public Security Bureau hadarrested two bond-fund managers - one from Citic and anotherfrom an unlisted firm - on suspicion of skimming off clientprofits for their own benefit.

Citic Securities said in a statement that the fund managerwas being investigated for personal reasons that do not involve the company.

HONG KONG LUXURY

Luxury stocks were under pressure in Hong Kong after theworld's No.1 luxury goods group LVMH said LouisVuitton sales in Europe have been hit by weak demand, especiallyfrom Asian tourists, as China's sluggish economy showed no signof improvement.

"People have to adjust their expectation that China doesn'thave good news," said Mark To, head of research at Wing FungFinancial Group, adding that the Hang Seng Index might hoveraround a key support level at 21,600 points.

"Despite the fact that China and Hong Kong stocks are reallycheap if you look at historical valuation, people are not goingto buy them now."